Tony Blair has hailed a last-minute deal to salvage the Kyoto agreement on global warming, though environmental campaigners have warned that the price of the deal is high.

The compromise came after hours of deadlocked talks in Bonn caused by Japanese opposition to "compliance" rules - the penalties which countries would have to pay for breaking the rules on carbon emissions.

I am not entirely sure I will wake, in fact I almost wonder if I'm dreaming

Margaret Beckett

But eventually, after a gruelling all-night negotiating session, agreement came.

Mr Blair said: "It shows that the international community can face up to the challenges of the modern world and globalisation when they sit down together."

Meanwhile a tired Margaret Beckett, the UK Environment Secretary, said: "I am delighted we have managed to reach agreement this week in Bonn."

Re-writing the Kyoto agreement was made necessary by new US President George W Bush's rejection of the treaty signed by his predecessor, Bill Clinton.

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"It was hard fought and everyone had to be flexible. This was the only way to find a global solution to a global problem," Mrs Beckett said early on Monday.

"I am not entirely sure I will wake, in fact I almost wonder if I'm dreaming."

Mrs Beckett was 'delighted' by the deal

She praised the negotiating skills of the EU delegation and said its members worked together "fantastically... everyone worked together, they were magnificent".

Mrs Beckett rejected the charge that the Japanese had driven a "coach and horses" through the protocol.

"No, of course not, not remotely," she said.

But Kyoto had required industrialised countries to cut their emissions of six greenhouse gases by
5.2% below their 1990 levels and conservationists say that with the Bonn agreement that figure has been reduced to about 2%.

"We have a good strong element in all of the packages. We have a deal."

Mrs Beckett said that in order to achieve the deal all parties had to give some ground.

The protocol has been heavily diluted. Its effect on the climate has been massively eroded

Friends of the Earth

"In the end that balance of trading off came to a broad agreement," she said.

The conference could have amended the protocol in Bonn to give it full legal force, but they have decided to delay that amendment until the first meeting of the parties after the ratification, expected in 2002.

Kate Hampton, climate campaigner of Friends of the Earth International, said: "The Kyoto protocol is still alive. That in itself is a triumph for citizens
all over the world who have campaigned so hard for governments to act to tackle dangerous climate change.

'Disaster' for Bush

"It is also a political disaster for President Bush, who with the arrogance of power, thought that his decision to renege on Kyoto would be enough to kill it.

"But the price of success has been high. The protocol has been heavily
diluted. Its effect on the climate has been massively eroded."

Greenpeace climate policy director Bill Hare blamed Opec, the fossil fuel industry and the United States for what was now a "watered down version" of Kyoto.

"They failed to kill off the Kyoto Protocol at this meeting in Bonn, but they came close and what survives is a weaker version of the agreement than was adopted in Kyoto in 1997."

America attacked

Liberal Democrat environment spokesman Malcolm Bruce welcomed the deal but stressed the importance of maintaining the pressure on the United States.

"Today's agreement demonstrates that the rest of the world is willing to make a start on tackling climate change, even if the US is not," he said.

"America has abdicated its role as world leader on the issue of climate
change, and now it is up to the rest of the world to keep up the pressure to
reduce carbon emissions."

Speaking for the Tories, the party's environment spokesman Damian Green said: "This is clearly a second best deal, but a second best deal is better than no deal at all."

Ahead of ratification there are more negotiations scheduled to start in October at Marrakesh in Morocco.